The GOP Plan On The Financial Crisis: Let The Banks Fail

By Big Tent Democrat, Section Economy
Posted on Sun Mar 08, 2009 at 09:36:54 PM EST
Tags: (all tags)

Share This: Digg!

NYTimes:

John McCain and Richard C. Shelby, two high-profile Republican senators, said on Sunday that the government should allow a number of the biggest American banks to fail. “Close them down, get them out of business,” Mr. Shelby, the senior Republican on the Banking Committee, told ABC’s “This Week With George Stephanopoulos.” “If they’re dead, they ought to be buried.” While the Alabama senator did not say which banks to shutter, he suggested that Citigroup might be on that list, saying the bank has “always been a problem child.”

Mr. McCain, appearing on “Fox News Sunday,” echoed that sentiment without identifying any banks. Mr. McCain, who lost the presidential election last November, also accused the Treasury Department of avoiding the “hard decision” to let “these banks fail.”

[More...]

I bet temporary nationalization does not sound so bad now. In that sense, I think this is a good wakeup call for President Obama and Treasury Secretary Geithner -- bailout money for free ain't coming that way anymore. Bailout money will probably require temporary nationalization now. Enough with the playacting. Time to take action. Time for temporary takeovers of banks like Citi. It's the only choice now.

Speaking for me only

< Sunday Afternoon Open thread | The Economist Calls for an End to the Drug War >

Legal

Nothing on this site should be construed as legal advice. TalkLeft does not give legal advice.

TalkLeft is not responsible for and often disagrees with material posted in the comments section. Read at your own risk.

The GOP Plan On The Financial Crisis: Let The Banks Fail | 76 comments (76 topical)

Readers Must Login or Create an Account to Comment

In America, a bank can't fail (5.00 / 3) (#1)
by andgarden on Sun Mar 08, 2009 at 09:41:53 PM EST

and fail to be nationalized. Here, bank failure means that the FDIC shows up on friday afternoon.

It is likely that the FDIC does not have the reserves to cover the checking and savings accounts currently at Citi. So here's the question: if Citi "fails," will Dick Shelby filibuster a bill allowing the Treasury to recapitalize the FDIC?

Liquidation is what Shelby meant (5.00 / 1) (#3)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:44:55 PM EST

I saw Marshall's post and I thought he played stupid in it.

Temporary nationalization is an attempt to keep the entity alive - the pre-privatization moniker is really quite descriptive.

Shelby means bury it and sell off the carcass.


Think of it this way: (5.00 / 3) (#49)
by Anne on Sun Mar 08, 2009 at 10:39:16 PM EST

It's like finding out you have cancer and being told that it can be treated, and maybe even cured, but it might take a while, and some of it might not be a lot of fun.

Would you refuse treatment because your doctors couldn't tell you with any specificity exactly how long it would take to cure you?

Or would you get the best medical advice and treatment plan you could find, hunker down and get on with that treatment, and with living your life?

Face it: more than a few of these banks have a cancer, and it either gets treated, with a possibility of a return to economic health, or it doesn't, and it's only a matter of when they die, not if they die.


Mr.President, there's a cancer (5.00 / 1) (#50)
by caseyOR on Sun Mar 08, 2009 at 10:41:27 PM EST

on the financial system.

Cancer-- still a good description, even after all these years.


I just disagree with you. (5.00 / 1) (#57)
by caseyOR on Sun Mar 08, 2009 at 11:05:42 PM EST

I don't believe any bank is off limits as far as nationalization is concerned. At some point the taxpayer gets to yell "stop", and the looting of the treasury to prop up failed financial institutions has to end.

Nobody is suggesting that all banks be nationalized. I am pretty sure that no one wants to nationalize banks that don't need to be. The economy will not be well-served by the government propping up zombie banks.

And, personally, I wouldn't mind seeing some banking executives reduced to living in their cars and standing in line at the food bank to feed their families. And there are some that might belong in jail.


No, I don't think it's simple. (5.00 / 3) (#65)
by caseyOR on Sun Mar 08, 2009 at 11:35:03 PM EST

I don't know of any commenter at TL who thinks it will be simple. Nor do I think it is just of matter of "take them over and no worries." The financial system is a big mess. Fixing it will be a long, hard slog. What Treasury is doing now will only prolong the agony. These banks are insolvent. Throwing taxpayer money at them is not fixing anything. Let's stop pretending these are viable businesses. The longer we wait the more it will cost and the messier it will be.

By the way, we ended up in the red with the S&L takeover because the government sold off the assets too quickly and too cheaply.


: "Let's stop pretending...." (none / 0) (#81)
by kdog on Mon Mar 09, 2009 at 08:50:16 AM EST

these are viable businesses"
I like that line...very very well said.
Am I bugging or for the first time in my life is the GOP sticking up for the little guy, while the Dems prop up three-piece thieves? I can almost hear Rod Sterling....do do do do...do do do do:) Dems better watch or the gains of the last two elections will disappear faster than money down the banking rabbit hole.

I would like for Shelby to explain the difference (none / 0) (#5)
by andgarden on Sun Mar 08, 2009 at 09:48:03 PM EST

between nationalization and liquidation.


I think he did (none / 0) (#8)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:51:33 PM EST

in the quote I have.

He said let it die - to wit, liquidate it.

Temporary nationalization is about trying to keep it alive - fix it and reprivatize it.

Of course, both require a receivership process but with different goals.

It is a pretty simple concept - Chapter 7 vs. Chapter 11 (but with Chapter 11 being the government being the DIP.)


Either way, Uncle Sam (none / 0) (#12)
by andgarden on Sun Mar 08, 2009 at 09:53:52 PM EST

is on the hook for a lot of money.


Hard to say (5.00 / 2) (#17)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:55:13 PM EST

The issue of deposit insurance is an interesting one but the REAL issue is dealing with the sh*tpile.


Frankly, I'm all for liquidating the sh!tpile (5.00 / 1) (#21)
by andgarden on Sun Mar 08, 2009 at 09:59:16 PM EST

though maybe not immediately. That's why I think government seizure would be preferable.


: For Citi (5.00 / 2) (#25)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:02:11 PM EST

it is inevitable. Complexity be damned.

Say it is a decade (none / 0) (#45)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:29:32 PM EST

Why do you object to that?


: No (5.00 / 2) (#73)
by Big Tent Democrat on Mon Mar 09, 2009 at 12:40:59 AM EST

They will not be healthy unless you believe that the government should give them money for free.

Continental Illinois (none / 0) (#52)
by Steve M on Sun Mar 08, 2009 at 10:42:58 PM EST

is by far an outlier. But the answer is, it takes however long it takes to get fair value for the assets.


Find me another bank (none / 0) (#61)
by Steve M on Sun Mar 08, 2009 at 11:25:09 PM EST

that took anywhere near a decade to re-privatize. Go ahead, try. The reason a bank might spend a long time in receivership is that its assets are unusually toxic and difficult to dispose of - which means your magic wand of a solution would have problems as well.

You'd do well, frankly, to put aside the wiseass tone and stop assuming you know more about this issue than everyone here, because odds are you don't. If you have superior knowledge you're certainly hiding it well.


Continental Illinois (5.00 / 1) (#71)
by lambert on Mon Mar 09, 2009 at 12:04:54 AM EST

Hasty search yields this case study from 2002:

September 26 1984: Permanent solution put in place, effectively nationalising Continental using FDIC funds

1991: FDIC sells off its last equity stake in Continental, bringing the rescue programme to a close some seven years after the banks near collapse

I'd call 7 years "anywhere near a decade." And, interestingly, the idea in 2002 that we there was a legal framework for nationalization was uncontroversial.


: Right (none / 0) (#72)
by Steve M on Mon Mar 09, 2009 at 12:18:13 AM EST

But when I said "find me another bank" I meant, you know, ANOTHER bank besides the one we were talking about...

Okay dude (none / 0) (#69)
by Steve M on Sun Mar 08, 2009 at 11:53:06 PM EST

I will list the duration of every bank receivership in history, just to please you. Keep clicking refresh.


It is decidedly not brilliant (none / 0) (#77)
by cal1942 on Mon Mar 09, 2009 at 01:51:04 AM EST

to delay and look for ways to preserve these entities intact. Start the process asap.

Delays will only deepen damage to the economy and make recovery more difficult and wreak terrible havoc and suffering. Don't let the early 30s happen again.


Why (none / 0) (#75)
by cal1942 on Mon Mar 09, 2009 at 01:37:55 AM EST

What damage to its franchise and operations might be done in the process?

do you care what happens to the Citigroup franchise?

Sounds to me like the author is concerned that everything stay in place, the management, stockholders, etc. Does the author have a vested interest in Citigroup?

Personally I believe Citigroup and others of its ilk should each be broken into about 20 or 30 Frank and Charlies Bank and Bar & Grill.


BTW (none / 0) (#4)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:45:53 PM EST

It would be informative to know what the FDIC's exposure is in Citi. Do you know?


FDIC is on the hook (5.00 / 2) (#14)
by caseyOR on Sun Mar 08, 2009 at 09:54:19 PM EST

for up to $250,000 for each depositor, nothing more. FDIC has no responsibility for bondholders or brokerage accounts or any of the other stuff Citi does. How many depositors does Citi have?


maybe (5.00 / 1) (#20)
by andgarden on Sun Mar 08, 2009 at 09:57:25 PM EST

$100B.


See (none / 0) (#23)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:00:20 PM EST

the deposit insurance is not the issue.


I think with a bank as big as Citi (none / 0) (#29)
by andgarden on Sun Mar 08, 2009 at 10:07:30 PM EST

the Treasury will be looking to bypass the FDIC. They will probably want to keep all of the depositors whole, because part of the crisis last fall came from a run on the big banks by big depositors. If they aren't protected at Citi, all of the big banks will see similar runs again.


Hmmm (none / 0) (#33)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:12:30 PM EST

Sounds like a pitch for temporary nationalization to me.


: Absolutely (none / 0) (#34)
by andgarden on Sun Mar 08, 2009 at 10:13:32 PM EST

For banks like Citi $250K isn't enough (none / 0) (#48)
by andgarden on Sun Mar 08, 2009 at 10:38:23 PM EST

My guess is that a run by the uninsured depositors could take all of the big banks down. And if they're not insured, why shouldn't they try to get out?


That is the group of people that... (none / 0) (#53)
by santarita on Sun Mar 08, 2009 at 10:43:52 PM EST

Mr. Geithner and Mr. Bernanke are worried about. The big stakeholders, especially the ones with foreign accents.


: There is good reason to be worried (none / 0) (#54)
by andgarden on Sun Mar 08, 2009 at 10:49:20 PM EST

It's true that many (none / 0) (#66)
by andgarden on Sun Mar 08, 2009 at 11:35:29 PM EST

are in T bills and various other banks. If you'll recall, the race to T-Bills last fall was a major part of the problem: a crisis of confidence in the banks caused many people over the limit to buy them, thus destabilizing many of the biggest banks.


: Beg to differ (5.00 / 1) (#85)
by CST on Mon Mar 09, 2009 at 11:31:28 AM EST

on this:
"It's not like banks don't know how to run banks and don't know how to do it profitably."
That would seem to be EXACTLY what it's like. Those "bad assets" didn't appear out of thin air.

All checking and savings deposits (none / 0) (#6)
by andgarden on Sun Mar 08, 2009 at 09:49:39 PM EST

up to a cap of $250,000 per person and $500,000 per married couple. I don't have the figures at hand, but it's a lot of money.


The hugeness, BTW, is why (none / 0) (#7)
by andgarden on Sun Mar 08, 2009 at 09:50:59 PM EST

the FDIC didn't just seize Wachovia. They don't have a clue what to do with the 4-5 really big banks.


The clue in one word (5.00 / 2) (#15)
by lambert on Sun Mar 08, 2009 at 09:54:35 PM EST

or rather, acronym:

RICO.

That's what to do. The business that's straight will go on. It's the stuff that's crooked that nobody can understand.


No idea what you're talking about, Lambert (none / 0) (#36)
by andgarden on Sun Mar 08, 2009 at 10:15:45 PM EST

You're a funny guy, but the conspiracy theory you're pitching seems unsubstantiated to me.


Well (5.00 / 2) (#38)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:18:14 PM EST

the CDO and CDSs were pretty shady dealings.

Calling some of it fraud is not so outlandish.


"Fraud" is just what William Black... (5.00 / 1) (#64)
by lambert on Sun Mar 08, 2009 at 11:32:41 PM EST

... of S&L fame called it. Yves:

By way of background, William Black is a former senior bank regulator, best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating. He is currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City.

You can't conduct a meaningful stress test without reviewing (sampling) the underlying loan files and it seems likely that the purchasers of securitized instruments (not just mortgages) do not even have the loan file data. Moreover, loss ratios vary enormously depending on the issuer, so even a bank that originates (or has purchased a bank that originates) similar product cannot simply take its own loss rate and extrapolate it to the measure the risk on the value of securitized credit instruments.

The regulators are overwhelmed because of personnel cuts (particularly heavy among their best, most experienced examiners that had worked banks that had engaged in sophisticated frauds. Buyouts were common, because more experienced examiners appear more expensive. This isn't true when you consider effecitiveness and productivity, but management didn't care about that. Treat what I write after the colon as hearing from me at my most serious and thoughtful: it is vastly more difficult to examine a bank that is engaged in accounting control fraud. You can't rely on the bank's books and records. It doesn't simply take more, far more, FTEs -- it takes examiners with experience, care, courage, and investigative instincts and abilities. Very few folks earning $60K are willing to get in the face of the CEO and CFO making $25 million annually and tell them that they are running a fraudulent bank and they are liars. FYI, this is one of the reasons why having "resident examiners" never works. The examiners don't even get to marry the natives. They get to worship God's annoited. Effective examination is good for you, but it is very unpleasant, ala a doctor's finger up your rectum. It requires total independence.

So, the examination force doesn't have remotely the numbers or the relevant experience and mindset to examine the largest banks with the greatest problems.

Yves here. Black is not using the fraud word lightly.

So, only "outlandish" if you don't give Black any credibility. Some won't, I suppose.

Of course, if you don't want to do your homework, you can yammer about "conspiracy theories." It's certainly easier, and as long as nobody pays any attention, no harm done.


In particular, (none / 0) (#39)
by andgarden on Sun Mar 08, 2009 at 10:20:55 PM EST

I mean what he's been writing about the bailout last fall.


Well (5.00 / 3) (#40)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:22:51 PM EST

the AIG stuff was at the center of it all, selling its AAA rating to cover the Big Sh*tpile was pretty much a conspiracy to defraud.

I do not know if that is what Lambert has been writing about but I can tell you that folks I know who were at AIG think it was criminal.


The bond rating orgs (5.00 / 1) (#41)
by andgarden on Sun Mar 08, 2009 at 10:24:17 PM EST

should probably be investigated by the SEC and the FBI.


Do we think the SEC is (5.00 / 2) (#44)
by Anne on Sun Mar 08, 2009 at 10:29:25 PM EST

even capable of being on the leading edge of investigating? Or has it been reduced to the Commission of "Duh?" Or, is that (thank you, Homer Simpson), "D'Oh!"

I'm starting to think that it's the SEC that needs to be investigated.


: Don't know about the SEC, but (none / 0) (#46)
by caseyOR on Sun Mar 08, 2009 at 10:32:14 PM EST

the FDIC has advertised job openings for criminal investigators.

Definitely (none / 0) (#42)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:24:52 PM EST

That's not very "particular" (5.00 / 2) (#70)
by lambert on Sun Mar 08, 2009 at 11:55:33 PM EST

Again, you're throwing words around like "conspiracy theory" with no evidence to back them up. How on earth is anyone suppose to respond to a statement like "what he's been writing about the bailout last fall"*?

I mean, is there any concrete problem you have, other than a vague disquiet that some blogger's trying to connect the dots?

Trillions of dollars of taxpayer money, and nobody knows where it went or who got it. You can say "Move along people, move along" and yammer "conspiracy theory," or you can try to do your homework. I'm doing my homwork. Unlike some.

NOTE * Yes, I've done good deal of writing on it, when very few in the left blogosphere were covering the story at all, I might add.


A Large Part of the Problem w/... (none / 0) (#51)
by santarita on Sun Mar 08, 2009 at 10:42:05 PM EST

the CDOs, credit default swaps, and more creative and complex instruments was that they were in large part unregulated and, if there were regulations, the regulatory agencies weren't on the job. So then in the law of the jungle atmosphere, you have to rely on senior management and boards to do their jobs. Which is what they didn't do. It was an atmosphere conducive to fraud. CDO's and credit default swaps are not inherently evil.


Huh? (none / 0) (#62)
by lambert on Sun Mar 08, 2009 at 11:26:43 PM EST

What "conspiracy theory"? Easy to throw words around, but if you think I'm "pitching" one, you ought to be able to cite chapter and verse, right?


Well, a sense of humor is important (none / 0) (#67)
by lambert on Sun Mar 08, 2009 at 11:36:52 PM EST

So I value your compliment highly.

See below for William Black on "fraud." For a less authoritative, but still interesting take on the bubble, RICO, and old-fashioned bucket shops, see here.


I think (none / 0) (#10)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:53:01 PM EST

they wanted to avoid seizing Wachovia but they were going to without a deal on the day Citi (of all banks) stepped in (and then BOA made a better offer).


The offer was from Wells (none / 0) (#16)
by andgarden on Sun Mar 08, 2009 at 09:55:04 PM EST

I'm not even sure the FDIC had enough capital at the time to deal with Wachovia.


Citi first (none / 0) (#19)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:56:09 PM EST

and then Wells. Good point.

The government always has enough money. Seriously. that is what folks never seem to understand.


Sheila Bair made that same point (none / 0) (#22)
by caseyOR on Sun Mar 08, 2009 at 10:00:05 PM EST

on 60 Minutes tonight. She reminded Scott Pelley that the FDIC is backed by the full faith and credit of the US government. She was quite clear that people should keep their deposits under the $250,000 limit per bank, and if they do that then their money is safe.


: Zactly (none / 0) (#24)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:01:41 PM EST

: Absolutely true (none / 0) (#26)
by andgarden on Sun Mar 08, 2009 at 10:03:03 PM EST

But it would not be good for the FDIC to show a negative balance.

To give an idea of scale (none / 0) (#9)
by andgarden on Sun Mar 08, 2009 at 09:52:55 PM EST

Wells and Wachovia combined supposedly have almost $800B in deposits.


: Well (none / 0) (#13)
by Big Tent Democrat on Sun Mar 08, 2009 at 09:54:04 PM EST

then the issue is how this so called bad bank idea could possibly work?

: It's not the scale of deposits that matters (none / 0) (#18)
by lambert on Sun Mar 08, 2009 at 09:55:48 PM EST

It's the complexity of the transactions.
And the complexity, just like Enron, is there to cover up fraud.
So, triage by making sure the simple parts get handled first....

The rules may have changed (none / 0) (#78)
by cal1942 on Mon Mar 09, 2009 at 01:56:47 AM EST

when the cap was raised to $250,000.

Before, the rule was that each party of a joint account with EQUAL rights was insured up to $100,000.

Don't know if the rules cahnged when the cap was raised.


Hear, hear! (5.00 / 2) (#2)
by Radiowalla on Sun Mar 08, 2009 at 09:42:21 PM EST

Let's get on with the task at hand. Take over the failing banks, run them as public utilities until they are once again functional. At that time, let them become private again, but under a stricter regulatory framework.

It's time to get off the pot.

: And (none / 0) (#74)
by cal1942 on Mon Mar 09, 2009 at 01:22:54 AM EST

break them in little pieces and make sure they stay that way with up-to-date anti-trust law, a new Glass-Steagall type wall between commercial and investment banks, stringent rules governing mergers, a single bond rating company, etc. I like what Sanders (I believe) said 'too big to fail is too big to exist.'

Why not keep on running them... (5.00 / 2) (#11)
by lambert on Sun Mar 08, 2009 at 09:53:06 PM EST

... as public utilities?

Why bring back the CEOS, the financial engineers, the bucket shops, and all the fraudsters to scr*w things up again?

Banking should be about as exciting a business as running the local gas company.

Then, if people with a zillion or two to throw around want to gamble with it, let 'em do so in a place where it doesn't scr*w up our homes, our cars, our health, our education, our jobs...

: Before (none / 0) (#76)
by cal1942 on Mon Mar 09, 2009 at 01:43:16 AM EST

the 80s commercial banks were a pretty mundane deal. Not exactly rocket science. No creativity needed. And that's a good thing; look what happens when they get 'creative.'

I agree with Krugman (5.00 / 1) (#35)
by themomcat on Sun Mar 08, 2009 at 10:15:04 PM EST

and others who have been saying all along that these failing banks needed to be temporarily nationalized which leads me to some questions. Since the major reasons that Citi, et al are in such dire straights is because they weren't regulated, got into investing in derivatives, credit default swaps and some other banking practices, that I really don't understand, what kind of regulation should be put in place to keep this from happening again? Should it be some form of Glass-Steagall? Should Gramm-Leach-Bliley be repealed or amended? Should there be a separation of banking and investment and a limit on how big a financial institution can get? How will this affect AIG, I know they are not a bank, but they insured the derivatives of some of these banks? I'm not an economist, obviously, just thought I'd ask.

You've Asked Some Very Important Questions... (none / 0) (#59)
by santarita on Sun Mar 08, 2009 at 11:11:08 PM EST

and the answers are dependent in large part on large social and political issues - like what role should the US (or US regulated financial institutions) play in the world economy and should all banks or only some large banks be much more regulated...


: The biggest (none / 0) (#79)
by cal1942 on Mon Mar 09, 2009 at 02:01:54 AM EST

social and political damage will be done if this is delayed and dealt with in a timid manner.

You don't have to be an economist, (none / 0) (#80)
by NYShooter on Mon Mar 09, 2009 at 06:18:01 AM EST

nor is it that complicated.

"Follow the money," Deep Throat told us 35 years ago.

Quick-sale mortgages are fine; Bundling, no problem, even derivatives are o.k. It's when the "three card Monte" game: slice, dice, chop, and puree, where the magician goes, "poof," blows pixie dust into the transaction and its mirved into millions of untraceable pieces that the word, "fraud," enters the picture.

If you couldn't count it, you couldn't value it, yet they sold insurance against it.....fraud #1.

Couldn't understand it? No problem; the rating agencies did your work for you. But they couldn't count it either, yet they rated it.......fraud # 2.

But, someone had to be watching what was going on; We did have a S.E.C........oops, fraud # 3.

And the cowboy is chopping wood in Crawford; yup, book-learnin is for them Librul weannies; "Go with the gut," is what real men do.


: That he became pResident--Fraud Zero (5.00 / 1) (#82)
by jawbone on Mon Mar 09, 2009 at 10:38:24 AM EST

Okay, maybe not fraud zero as in patient zero, but surely one of the frauds via the Supreme Five.
Sorta a joke. Sick one. On us.

So big banks have been fully looted (5.00 / 5) (#37)
by Cream City on Sun Mar 08, 2009 at 10:16:06 PM EST

by the big-money Republicans. That's what this means. Now that they've been looted, dump 'em on the public to fix them. Then the plan is to reprivatize, meaning to put the banks back in the hands of the big-money Republicans . . . probably in time to make big donations for the 2012 election. Thus, the urgency. Jeez, we've been so had again.

Close 'Em All and Start Over ... (none / 0) (#27)
by santarita on Sun Mar 08, 2009 at 10:05:17 PM EST

again with a clean slate. Give them a new mandate. No more big loans with more than one lender, no more interstate banking, no more international trade financing. But keep the ATMs, please.

: To be clear (5.00 / 1) (#32)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:11:47 PM EST

That is NOT what Shelby is advocating for - he is saying let them die.
Liquidate Citi and bury it.

So Shelby Is Advocating The Equivalent of ... (none / 0) (#28)
by santarita on Sun Mar 08, 2009 at 10:06:50 PM EST

a liquidating Chapter 11. Sounds good to me. Might take some time unless we want fire sale prices, but overall sounds good to me.

: Chapter 7 (none / 0) (#30)
by Big Tent Democrat on Sun Mar 08, 2009 at 10:11:01 PM EST

Story on the local news (none / 0) (#31)
by andgarden on Sun Mar 08, 2009 at 10:11:29 PM EST

about firesale auctions of foreclosed homes. The least sh!tty part of the sh!tpile, apparently.

Do Accounting (none / 0) (#87)
by DaleA on Mon Mar 09, 2009 at 04:37:19 PM EST

on a contract basis. Given what I have seen, accounting everywhere is a mess. Firms are running without enough accountants to do a respectable job. For endings, they bring in a different group of temps each time to put them over the hump. Which means that very few accountants know the long term practices of a firm. Nor are there long enough to get a handle on what is happening.

I have seen places that were years behind in assembling AccountsPayable packets. And months behind in filing. The AP packet is one of the essential units of auditing; it shows where money went. If it requires a small army of file clerks and AP knowlegable people into a condition where one can begin to figure out what happened, things will go slowly. Saw one AP with 6 months of unfiled packets. This was about 55,000 packets, about 250,000 document pages. it took 4 months to begin to get it into shape. The auditors ordered this, and the AP resisted. But finally gave in.

If the records are as messed up as stated, this could be a growth industry. Neat orderly records are the easy way. Chaotic and messy records almost always are part of a cover-up.